- Retail Sales reports are expected to show gains

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Retail Sales reports are expected to show gains

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Retail Sales reports are expected to show gains

Tuesday, 15 July 2008

By Christian Hill
The economic calendar gets underway tomorrow morning with five reports being released at 8:30 am. The PPI Index is expected to post another increase, albeit a slightly smaller increase than last month.
This can likely be attributed to the slight pullback in commodity prices over the last month. This can also explain the slight increase expected in the Core PPI this month, as it excludes both food and energy costs, meaning the remaining components saw increases in costs.

The Retail Sales figures for June are also released at 8:30 am Tuesday, and both the Retail Sales reports are expected to show gains. These gains are expected to be less than last months, most likely due to a majority of the economic stimulus checks being cashed in May. Not surprisingly, the report excluding auto sales is expected to show a smaller drop than the overall report. With the current economy, big-ticket items like cars simply aren’t going to sell.

Wednesday morning sees the release of the CPI and Core CPI Index at 8:30 am. The CPI Index is expected to post another increase from last month, no doubt due to rising food and energy costs. Core CPI is anticipated to equal last month, with a 0.20 percent increase.

The FOMC minutes from the June 25 meeting are released at 2 pm on Wednesday, and will be scrutinized by the market to glean any hint as to the direction the Fed will take at the next meeting. On Thursday, the Philadelphia Fed Index is released, and is expected to show continued contraction. The Index is a monthly survey of purchasing managers in the tri-state area, and if any positive spin can be put on the Index, it is that the contraction isn’t as bad as the previous month.

Thursday sees the release of the Building Permit and Housing Start reports. Building Permits are anticipated to show a small increase, essentially matching last month’s number. Housing Starts are expected to show a decrease of 7000 units, which would be surprising, as this is the time of the year when home construction really gets going in the northern states. With permits increasing, but starts decreasing, it may just signal a delayed start to this summers building season.

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